Klon Corporation owns 70 percent of Brant Company's stock and 60 percent of Torkel Company's stock. During 20X8, Klon sold inventory purchased in 20x7 for $61,800 to Brant for $103,000. Brant then sold the inventory at its cost of $103,000 to Torkel. Prior to December 31, 20X8, Torkel sold $43,000 of inventory to a nonaffiliate for $73,000 and held $60,000 in inventory at December 31, 20X8. Required: a. Prepare the journal entries recorded by Klon, Brant, and Torkel during 20X8 relating to the intercorporate sale and resale of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Entries recorded by Klon Corporation: View transaction list Journal entry worksheet Record the sale of inventory to Brant Company. Note: Enter debits before credits Event General Journal Debit Credit 1 Record entry Clear entry View general journal Entries recorded by Klon Corporation: View transaction list Journal entry worksheet Record the cost of goods sold. Note: Enter debits before credits. General Journal Debit Credit Event 2 Record entry Clear entry View general journal Entries recorded by Brant Company: View transaction list Journal entry worksheet > Record the purchase of inventory from Klon. Note: Enter debits before credits. General Journal Debit Credit Event 1 Record entry Clear entry View general journal Entries recorded by Brant Company: View transaction list Journal entry worksheet Record the sale of inventory to Torkel Company. Note: Enter debits before credits. General Journal Debit Credit Event 2 Record entry Clear entry View general journal Entries recorded by Brant Company: View transaction list Journal entry worksheet Record the purchase of inventory from Brant. Note: Enter debits before credits. General Journal Debit Credit Event 1 Record entry Clear entry View general journal Entries recorded by Torkel Company: View transaction list Journal entry worksheet Record the sale of inventory to the nonaffiliates. Note: Enter debits before credits. General Journal Debit Credit Event 2 Record entry Clear entry View general journal Entries recorded by Torkel Company: View transaction list Journal entry worksheet Record the cost of goods sold. Note: Enter debits before credits. General Journal Debit Credit Event 3 Record entry Clear entry View general journal b. What amount should be reported in the 20x8 consolidated income statement as cost of goods sold? Cost of goods sold for 20x8 c. What amount should be reported in the December 31, 20X8, consolidated balance sheet as inventory? Inventory at December 31, 20x8 d. Prepare the consolidation entry needed at December 31, 20X8, to remove the effects of the inventory transfers. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries Record the consolidation entry for inventory. Note: Enter debits before credits. Entry Accounts Debit Credit 1 Record entry Clear entry view consolidation entries
